Sam Zell is the Tribune Co.'s controversial owner.
Sam Zell is the Tribune Co.'s controversial owner.
Sam Zell, the no-bull billionaire who took over the Tribune Co. in December, swept in promising to turn around its troubled newspapers, including the Los Angeles Times, Newsday and The Sun in Baltimore.
Zell raised spirits and initially won some converts in the ailing media company. But profits have been plunging, and it's become much tougher for him to meet huge interest payments on the company's debt. And NPR has obtained a recording of a combative meeting Zell held with some of Tribune's top journalists in Washington that may help explain why many of them are deeply skeptical of him.
Journalists as 'Overhead'
"This is the first unit of Tribune that I've talked to that doesn't generate any revenue. So all of you are overhead," Zell said during the late February meeting with editors and reporters for the company's Washington bureau.
Most reporters and editors who cover the government don't consider themselves overhead — they describe themselves as fulfilling a key role newspapers play in a democratic society.
But Zell doesn't stand much on ceremony. He has already fired a bunch of executives at his Chicago headquarters and said he wants immediate, radical change at the company's 11 daily papers and 23 TV stations.
"Three guys in a garage create YouTube, and we've got 800 people in Chicago who don't know their ass from a hole in the ground!" he said at the February meeting. "You chronicle what we've done in 60 days, and I promise you the next 60 days will be even more tumultuous."
Life with Zell
The 66-year-old real estate magnate openly mocked the buttoned-down culture at Chicago's Tribune Tower, as well. Zell relaxes by motorcycling, jokes publicly about the success of online pornography and describes himself as the Viagra of the newspaper world.
His longtime lawyer, David Bradford, says that's just Sam being Sam.
"He's a ton of fun. He's very inspiring — he's got a great sense of humor," Bradford says. "He's somebody who speaks the unvarnished truth."
Zell took over Tribune by borrowing billions against the future retirement funds of its employees. He effectively paid $315 million, and now Tribune is more than $12 billion in debt. As ad revenues plunge, Zell thinks a lot about that debt.
"Every month, I've got to make the payment," Zell says.
Making that payment is getting tougher all the time, as the economy worsens, revenues dry up and the company's credit rating falls under heavy scrutiny. Zell is considering selling Newsday in Long Island, one of his most profitable dailies.
The Washington meeting was far from the first time Tribune employees have felt the sting of Zell's barbed words. At a news conference in January, he mocked an Orlando Sentinel photographer who pointedly asked him about newspapers' public service mission. He derided the photographer's "journalistic arrogance" — and then cursed at her when she turned to leave.
The recording of the Washington meeting gives fresh insight into Zell's annoyance at what he sees as the self-importance of conventional journalists. He says they're peddling goods the public just doesn't want to read: too much insider politics and Iraq, not enough local news.
Many Tribune reporters and editors told NPR they're just as eager to embrace new ways for their papers to flourish financially, but they also want to preserve an independent press that functions as a watchdog.
Zell presented himself at the meeting as a corporate savior, noting that no one else wanted to buy Tribune after its former executives managed the company so poorly they had to sell it.
But NPR's interviews with a dozen Tribune company journalists revealed a deep skepticism of Zell's leadership.
"Boy, I'm not sure I understand anymore where the paper is at," says former Los Angeles Times political reporter Joe Mathews, who attended the Washington gathering. "There's been so much change at the top – ownership, editors – I sort of am confused about direction."
Zell has offered little clarity, says former newspaper editor Alan Mutter, a digital media investor who writes the blog Reflections of a Newsosaur..
"Going in and telling people, 'What you're doing isn't quite good enough and it needs to change,' and (then) not telling them how it's supposed to change, I think that's a problem," Mutter says.
Zell has invited ideas from employees. But he swatted away the Washington staff's suggestions and made it clear he thinks the bureau is bloated.
Does it "really require six people – or nine people – to cover the same Iraq story? I'm going to find out, and it's gonna be done one of two ways. I can do it or you can do it. Your choice," Zell told them.
Since then, the L.A. Times' Washington bureau has learned it must slice its staff from 47 people to 28 – part of deep, company-wide cuts. Yet Mathews says he's most concerned about the call for journalists to think of new ways to make money.
"I always thought there was a bright line there, and if you did that sort of thing you'd get fired," he says. "Reporters are there to serve readers, find the truth, get facts and present them to readers in as engaging a way as possible."
Zell insisted at the meeting that the news cannot be corrupted – but that bright lines are a luxury.
"Am I the only person in this room who really wants to win?" he demanded. "We are in crisis mode. The days of the newspaper being some kind of a holy monopoly are over."
Through aides, Zell declined to comment publicly until a conference call with lenders late next week. Every month, as he says, he has to make the payments.